Global Testing Corporation shares climbed sharply on Wednesday following a proposed acquisition by Taiwan-listed Tong Hsing Electronic Industries that would privatize the Singapore semiconductor testing business.
Stock in Global Testing jumped 109.7% to close at S$2.16, and reached an intraday high of S$2.20, a new 52-week maximum. That movement came after Tuesday's closing price of S$1.03. Tong Hsing has put forward a cash proposal valuing Global Testing at S$2.30 per share, which equates to an approximately 129.3% premium to the company’s one-month volume-weighted average share price prior to its trading suspension.
The proposed transaction is structured as a scheme of arrangement. If approved, Tong Hsing would obtain full ownership of Global Testing and the company would be delisted from the Singapore Exchange. Completion of the deal is conditional on approvals from Global Testing shareholders, the relevant Taiwanese investment authorities, the Singapore Exchange and the Singapore courts.
Tong Hsing described the acquisition as a means to bolster its footprint in semiconductor packaging and testing by uniting its existing manufacturing operations with Global Testing’s testing capabilities. The companies highlighted potential opportunities across several product areas - optical communications, power semiconductors, mixed-signal products and radio-frequency applications - citing an uptick in demand for more integrated packaging and testing solutions.
According to the companies, the move to privatize Global Testing is also intended to create greater operational flexibility, enabling tighter integration of the two businesses and more coordinated global expansion efforts.
The sharp intraday reaction was magnified by the stock’s historically low trading liquidity. Average daily volumes over the previous three months were approximately 2,875 shares, a thin float that can amplify price swings when a significant corporate action is announced.
Despite the large price increase, Global Testing’s shares traded below the S$2.30 proposed consideration by the close of the session, reflecting that the offer is not yet unconditional and still requires the range of approvals noted above.
Contextual summary
The proposed acquisition by Tong Hsing would transfer full ownership of Global Testing to Tong Hsing through a court-sanctioned scheme of arrangement, with a cash consideration of S$2.30 per share. The combination is presented as a strategic fit to expand capabilities across packaging and testing segments of the semiconductor supply chain.